Varieties of Worker Cooperatives in Tech
Working conditions in the tech sector are deteriorating. Leading tech firms like Google, once considered top employers, have laid off thousands of workers despite reporting profits. Traditional tech firms struggle to reconcile the paradox of high job quality and profitability. Can worker cooperatives offer an alternative for tech workers? Known for prioritizing equity and social well-being, can they succeed where traditional firms fail? I believe worker cooperatives are a viable solution for tech workers.
I want to share a framework that explains the different varieties of tech worker cooperatives. This framework helps us understand the various pathways tech workers can take to join the tech worker cooperative movement. It is also a valuable tool for shaping public policy and support institutions that foster the creation, growth, and sustainability of worker cooperatives in the tech sector.
In a previous blog post, I discussed the importance of tech worker cooperatives. Here, I turn to the different types of worker cooperatives I have observed in the tech industry. Although the global tech worker cooperative movement remains small, Patio, which unites over 80 tech worker cooperatives and connects approximately 1,500 cooperators across more than 24 countries, demonstrates that worker cooperatives offer a viable alternative to the traditional tech industry.
With about 73.3 million freelancers in the United States and roughly 1.5 billion freelancers worldwide, there is immense potential to organize workers through various cooperative models. Just as worker cooperatives are not a one-size-fits-all solution, there is no single blueprint for what a worker cooperative should be.
My research on tech worker cooperatives inspired this piece. This research is a comparative study of the tech worker cooperative ecosystems in Argentina (organized under FACT[TIC]) and the UK (organized under CoTech). FACT[TIC] is the Argentine Federation of Worker Cooperatives in Technology, Innovation, and Knowledge (Federación Argentina de Cooperativas de Trabajo de Tecnología, Innovación y Conocimiento) and CoTech is UK’s tech worker cooperative federation, Cooperative Technologists.
How did I become interested in worker cooperatives?
Before I get to the framework, let me briefly share how I became interested in worker cooperatives. Growing up, I wanted to contribute to economic development. My vision for economic development centers on creating good jobs and ensuring a high quality of work and life for all. As a child, I was curious about how we could build an economy and institutions that support these goals.
Interestingly, I first learned about worker cooperatives while studying abroad in Argentina in 2010. Although I was born in Yugoslavia (present-day Serbia)—a country known among industrial labor relations scholars for its self-management system in the 20th century—I learned very little about it. By the time I was growing up, all the former Yugoslav countries were transitioning from socialism to a private-sector-led capitalist economy. In school and beyond, we were taught about entrepreneurship, but never about self-management.
While studying abroad in Buenos Aires, I came across the empresas recuperadas por sus trabajadores, or worker-recovered enterprises. These are worker cooperatives formed when workers take over bankrupt factories. I found this phenomenon fascinating. When I was growing up, privatization, downsizing, and bankruptcy devastated many factories, leaving thousands of workers unemployed. In contrast, while workers in former Yugoslav countries largely accepted unemployment as inevitable, workers in Argentina reclaimed their workplaces. Today, about 400 recovered factories operate as worker cooperatives, providing jobs for 16,000 workers. The Argentine model showed me that worker self-management can be a viable solution, even in times of crisis.
The tech sector is now facing its own crisis, and I am interested in understanding which models can provide high job quality in an industry that is one of the fastest-growing and most in demand.
I published my honors thesis on Argentina’s worker-recovered cooperatives in 2012—the first United Nations (UN) Year of Cooperatives. Now, in 2025, the UN has once again declared it the Year of Cooperatives. This year, I am completing my master’s thesis (as part of my Ph.D. program), comparing tech worker cooperatives in Argentina and the United Kingdom. Coincidentally, my research on worker cooperatives seems to align with the UN’s declarations of the Year of Cooperatives.
I believe that 2025 is a pivotal year to advance resilient institutions that support cooperatives worldwide. While worker cooperatives are not a one-size-fits-all solution, they are a crucial tool for improving job quality.
Why do we need a framework for a variety of worker cooperatives?
Now, I’m moving on to the research framework, which consists of three key dimensions: legal status, employment relations, and business operations. The legal status dimension examines the legal forms worker cooperatives can adopt, along with the rights, responsibilities, and governance structures of both the cooperative and its members. The employment relations dimension explores the relationship between the cooperative and its worker-members, focusing on participation, decision-making power, democratic control, and mechanisms for sharing profits and risks. The business operations dimension analyzes why worker cooperatives are created and how they function.
In developing this framework, I benefited from the support of the Institute for Cooperative and Digital Economy (ICDE). As an ICDE fellow, I engaged in monthly discussions with other researchers, which helped refine my thinking. I also had the honor of attending the Digital Africa Rising Conference in Mombasa, Kenya, held from November 6–8, 2024, where over 500 representatives from 33 countries across Africa and beyond convened. These exchanges were instrumental in shaping my framework.
What follows illustrates the worker cooperative framework, highlighting and explaining its different varieties.
Legal Structure of Worker Cooperatives
- Formal
These are legally registered and recognized cooperatives that adhere to the International Cooperative Alliance’s (ICA) cooperative principles and values. An example includes all of Argentina’s tech worker cooperatives, which are part of the Tech Worker Cooperative Federation of Argentina (FACTTIC). - Informal
These are unregistered or loosely organized groups that operate under cooperative principles without formal recognition. A notable example is the UK’s tech worker cooperative federation, CoTech. - De Jure
These cooperatives are established through explicit legal frameworks, meaning they have clear legal recognition. An example is all of Argentina’s tech worker cooperatives that are part of FACTTIC. - De Facto
These cooperatives meet the ICA’s criteria for cooperatives but may or may not have formal legal recognition. Tech worker cooperatives that are part of CoTech fall under this category.
Employment Relations
- Employees
Cooperatives where workers are formally employed. An example includes de facto UK worker cooperatives registered as private companies limited by shares or guarantees.
Worker Membership Categories
- Self-Employed
Cooperatives structured around self-employed worker members. Argentina’s worker cooperatives are an example. - Freelancers
Networks of self-employed individuals who pool resources and clients and organize themselves into a worker cooperative. An example of this model is Smart in Belgium. - Hybrid/Other
Cooperatives that feature a mix of employment relations, often taking a formal but non-cooperative legal entity form. A relevant example is Colab worker cooperative in the U.S., which includes worker-members across multiple U.S. states and countries.
Business Operations (How They Start?)
- Start-ups
A new cooperative that was initiated by several workers. An example includes several tech worker cooperatives in Argentina and the UK. - Spin-offs
A cooperative formed by a group of workers who were previously employed by a private company. A tech worker cooperative in Argentina serves as an example. - Freelance
A cooperative that emerged from the collaboration of an informal network of workers. Some tech worker cooperatives in Argentina and the UK fall into this category. - Conversion
A private company that transitioned into a cooperative. One such case has been observed in Argentina.
Business Operations (How They Operate?)
- Merger
This involves two or more cooperatives combining into a single entity. However, no observed cases are documented. - Multi-Stakeholder
These cooperatives include diverse stakeholder groups, such as workers, consumers, and investors. The UK has legislation that supports multi-stakeholder cooperatives. - Holding/International
Some cooperatives act as holding entities with ownership stakes in companies across multiple countries. Examples include Mondragon and a single Argentine tech worker cooperative. - Federations and Networks
Alliances of cooperatives that collaborate for mutual support and market presence. A notable example is Smart in Belgium. - Recovered
These are businesses converted into cooperatives by workers following bankruptcy or economic crisis. Cases of such conversions have been observed in Argentina and Italy.
Business Operations (How They Operate?)
- Lifestyle Business
Cooperatives that prioritize a balance between work and personal life.- Example: Aspirations for many UK tech worker cooperatives.
- Life-long Employment
Cooperatives that focus on providing stable, long-term employment for their members.- Example: Aspirations of most Argentine tech worker cooperatives.
- Traditional Employment
Cooperatives that adopt conventional employment structures while maintaining worker ownership and governance.- Example: Some UK tech worker cooperatives.
What are the policy implications?
This framework is a useful guide for researchers to advance the theoretical understanding of formation of worker cooperatives and for practitioners who seek ways to get involved with worker cooperatives. This framework, based on research of tech worker cooperatives in the Global South (Argentina) and the Global North (United Kingdom), while also cross-referenced with literature on worker cooperatives, presents a useful guide that worker cooperatives in tech and other sectors can study and implement in their local jurisdictions.
In one study of worker cooperative businesses, DeBalsi identified three types of people who start worker cooperatives: 1) idealists – those who do it because of their values or social and ideological convictions, 2) pragmatists – those who do it for economic reasons, and 3) drifters – those who accidentally stumble upon worker cooperatives. In my own research and discussions, I found that these typologies hold, although there is sometimes a cross over among them.
The pursuit of a high quality of life and job is universal. Regardless of ideology or political views, all workers want to have a high quality of work and life. The history of cooperatives shows this. For example, Argentina’s El Hogar Obrero, was founded by a socialist, while Spain’s largest and the world’s most famous cooperative, Mondragon, was founded by a Catholic priest during Franco’s fascist regime.
In this Year of Cooperatives and looking towards 2030, worker cooperatives are an important engine for achieving the UN’s Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth.
To that end, Digital Africa Rising conference held in November of 2024 was an important catalyst for promoting the development of cooperatives. At the conference, I was especially inspired and impressed with Kenya’s cooperative movement and learned that Kenya’s Savings and Credit Co-operative (known as SACCOS) hold nearly a third of the national wealth. I was also struck by the similarities in the motivations and the struggles that cooperative members face across the world. Cooperative workers from rural Africa expressed similar desires for more autonomy and control at work, just like the workers I interviewed in the tech worker cooperatives in Argentina and the UK. Just like in Argentina and the UK, African cooperators discussed challenges related to financing, access to technology, inadequate and outdated laws, and limited awareness about cooperatives. Although these issues were broadly similar, this requires different local approaches, strategies, and tactics to find solutions. Despite the challenges, I believe that Africa’s co-operative future is young and bright (check out this brief video message) and that there is a future for the worker cooperative and other models that enhance quality of work and life.
Learn more about Stefan Ivanovski, the author